Be Careful Where You Buy Your Life Insurance

We are all familiar with stories about shady salesmen selling people fee-ridden insurance products without fully disclosing the fees and penalties for getting out of the product if you decide it is not for you. As if these salesmen weren’t enough to worry about, there’s something else you need to be aware of:

Certain organizations play by different rules than everyone else in the insurance business. To understand what I’m talking about, you NEED TO READ this article that was in yesterday’s Wall Street Journal. The article DOES NOT speak to highly of such organizations Modern Woodmen of America and Thrivent, which provides financial products for Lutherans. Both organizations have agents who make commissions on product sales.

What I found appalling in this article is the fact that Trivent has changed their rules so that they CAN’T BE SUED by their policyholders. Instead, disgruntled policyholders must go through arbitration. On top of that, Thrivent can make changes that are retroactive so that even if you bought the policy years ago under different rules, the changes can affect your policy. My question is: how can an institution prevent someone from suing them?

Anyway, the point I think we should take from this article is that we should not ASSUME that a fraternal institution that has earned our trust is going to look out for our best interests! If you want to look into their products, fine. However, get everything in writing and then get a second opinion.

8 thoughts on “Be Careful Where You Buy Your Life Insurance”

  1. “My question is: how can an institution prevent someone from suing them?”

    I’m no lawyer, but if you buy their product, and sign to their rules, then they take your money and you get their policy, the contract is in full force. Unless there is a specific law against the practice. Now if there is deception involved … that’s another story. Then the contract can be voided.

    What the article says insurers are doing is outrageous, but so are many transactions at the car dealership … I dunno, I guess it’s easy to get pissed off reading stuff like that, but what shall we do? Caveat Emptor!

  2. In the case of insurance policies, there is usually a clause in them that allows the insurer to amend the policy with notice. The notice is generally disguised as junkmail and worded in such a way as to hide the actual intent.

  3. While I’m not up on the legalities of this, it seems that companies which require their customers to sign away their right to recourse through the court system should be avoided. It means fundamentally that the company is more concerned about their bottom line than their customers.

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  5. That’s right, you should be careful where you buy your life insurance.

    Also, make sure you use an online service to compare rates and plans before meeting with an agent. That way, you know what the lowest prices are, and which insurers have the best plans available.

    Term life insurance rates have continued to fall for more than 10 years now, so you may want to consider comparing term life quotes with whole life, depending on what your needs are for life insurance protection.

  6. Yes, we all have the image in mind of shady agent selling shady goods. Good advice about getting everything in writing and then getting a second opinion. It’s good advice for just about anything as important as this. Life insurance is protection for your family so you want to be sure you’ve made the right choice.


  7. You are absolutely correct in insisting that one should get everything in writing. There have been way too many instances where promises fail to be kept and the losses can be enormous. When choosing an insurance company and policy, always pay attention to which life insurance provider you sign up with online. A good insurance provider website will be instrumental in finding you the best policy at the most affordable price. Look for sites accredited by the Better Business Bureau or recommended by financial giants like The Wall Street Journal or CNNMoney. Choose sites that only offer quotes from reputed insurance companies with ratings higher than A. Sites should not be affiliated to any company to avoid biased opinions and hard sell of particular products. Sites that offer professional support and client servicing through personal telephone calls are also preferable.

    Denise at AccuQuote

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